The nervous wait to exchange....
- Thread starter noj
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These guys haven't imposed that on us, fortunately. They know my situation and said they'd retain the plot while their estate agent sold my house, and pay the agent fees in doing so. I'd then need to find somewhere to live until next year when the house is fully finished, but I am in a fortunate position to do so with family. That's part of the reason why a move now like this is more feasible.
Looking around at better matching properties everything feels inflated, I guess everything is still due to the big stamp duty push through. I guess my nervous wait isn't for exchange but whether to let the market cool a bit and risk losing the plots, or jump in now and risk the value dropping by the time we actually move in next Feb.
Soldato
I wouldn’t have thought the value would drop by much. The market may slow down but depending on where it is your purchasing, there are a lot of overseas buyers paying full cash so there is somewhat a demand. In our situation we could have paid less for a new plot (by about 20k) on the development we are moving to, but in the long term I rather not have to deal with snagging issues etc. Is it worth the 20k more premium we are going to pay? Probably in the long term. Again, the development we are moving to has seen a 10k/year increase on the properties and it isn’t fully finished either. Houses there are selling quite quick tbf.
I would suggest you look further into it and see if it is actually worth while. There will always be “what ifs”, but if you are in the fortunate position to do it now it makes sense.
I would suggest you look further into it and see if it is actually worth while. There will always be “what ifs”, but if you are in the fortunate position to do it now it makes sense.
Are you buying the house to live in? If the answer is ‘yes’ then does it really matter?
House prices can go down but they rarely stay down for any significant period of time. There would need to be a substantial change to the status quo for that to change in the medium term.
COVID is a very different recession to the financial crisis. It’s impacted specific groups of people but others have gained from home working etc.
Will the market cool a bit now stamp duty is going back to normal? Yes probably, but will it decline in the near term? unlikely IMO and even if it does, it’s unlikely to stay that way in the medium term.
House prices can go down but they rarely stay down for any significant period of time. There would need to be a substantial change to the status quo for that to change in the medium term.
COVID is a very different recession to the financial crisis. It’s impacted specific groups of people but others have gained from home working etc.
Will the market cool a bit now stamp duty is going back to normal? Yes probably, but will it decline in the near term? unlikely IMO and even if it does, it’s unlikely to stay that way in the medium term.
Just a word of caution when buying completely new, don't forget you need to budget for the cost of flooring throughout. Many developers don't even include floor tiling in the wet rooms and if the house is quite big then those costs can mount up.
@Vita your 3-year old house might cost £20k more, but it'll already have carpets and flooring installed whereas you'd have to pay for those seperately on the new build. Likewise for the garden, need to budget for turf etc.
@Vita your 3-year old house might cost £20k more, but it'll already have carpets and flooring installed whereas you'd have to pay for those seperately on the new build. Likewise for the garden, need to budget for turf etc.
Soldato
Surely if your primary concern is value, then buying "brand new" 90% of the time will be more expensive than other avenues (couple year old new build or older houses).
This is on balance with a new build being brand new and the various benefits it brings.
As its a fairly personal question, and generally housing is desired/preferred in particular areas its not really a "one size fits all" type question.
This is on balance with a new build being brand new and the various benefits it brings.
As its a fairly personal question, and generally housing is desired/preferred in particular areas its not really a "one size fits all" type question.
- Do I think overall the market will drop? Unlikely but it may cool the current increase in prices.
- Do I think its likely a brand new build will drop value the moment you move in as they're no longer "new"? Yes (to varying degrees!)
Right now because of the inflated house price market, brand new homes (which are still selling at RRP) are far more competitive than they have been in previous years. That situation will probably change over the next 12-24 months as the house prices have been inflating due to covid / stamp duty holidays. But at the moment it's a very attractive option.
Generally speaking, historically a new build would lose value for the first few years (3-8 years). I'd probably guess that they won't for the next 18-24 months, but they won't rise as much as an older property would.
The market is going to cool down slightly as stamp duty ends, but this won't necessarily be a contraction, or house prices to go down. It's much more likely that growth will return to somewhere between normal and mental (what we have now). I don't personally see a situation where waiting it out will result in house prices being cheaper in 12-24 months.
What's more likely is that house A is worth 15% more than it was 12 months ago, and in another 12 months it'll be worth 7.5% more than it is now, and in another 12 months it'll be worth 3% more than it was 1 year before. The growth is slowing but the price is still rising.
Savings, earnings and house equity in a cheaper property (such as one you own now) will almost always be outstripped by growth in a bigger property. Effectively this is why people often say buy as big / stretch yourself as much as possible as early as possible (within reason) as it will all be relative in a few years time.
The market is going to cool down slightly as stamp duty ends, but this won't necessarily be a contraction, or house prices to go down. It's much more likely that growth will return to somewhere between normal and mental (what we have now). I don't personally see a situation where waiting it out will result in house prices being cheaper in 12-24 months.
What's more likely is that house A is worth 15% more than it was 12 months ago, and in another 12 months it'll be worth 7.5% more than it is now, and in another 12 months it'll be worth 3% more than it was 1 year before. The growth is slowing but the price is still rising.
Savings, earnings and house equity in a cheaper property (such as one you own now) will almost always be outstripped by growth in a bigger property. Effectively this is why people often say buy as big / stretch yourself as much as possible as early as possible (within reason) as it will all be relative in a few years time.
Really noticed this recently.
While a newbuild isn't generally of interest to me (we are about to complete on an old barn, polar opposite
), there are a number around here which, if i wanted to buy this type of house, really are quite competitive and attractive, especially once taken into account the lack of a need to gut the place as with anything old.This has never been the case in my living memory. These are located on infill plots in small clusters (usually demolished farm yards and other agricultural sites). The ones which i still view in the same light are the mass estate ones - i'll never understand them for as long as i live.
Really? Pretty much every new build around Gloucestershire has increased in value.
I don’t think that is the case, sure it will not be worth as much the day after you move in as a new house the developer is still selling but in reality that quickly dissipated as all the houses on the development are sold and the developers have moved on. It also assumes the developers are not increasing their prices in line with the market as time passes.
It also depends on how much developers are charging you for finishes like grass, better doors and flooring. Some go a bit mad with the options list and that often isn’t reflected in the resale value.
No idea but I sold my house this year for 14% more than I paid for it in 2014. Pretty much every other sale around has been an increase over the new cost. The rise in values was also in existence prior to Covid. I don't buy the whole 'new houses devalue like cars' rhetoric I often see branded around. I know other areas as well with similar rises in value not just in Gloucestershire.
All great input, thanks guys. I think we'll push ahead and see where the path takes us. I'm happy with paying the premium for new builds, done it once already and hope to make a bit of money.
I've scoped out everything I can think of too, turf, flooring, blinds, upgrades, fixtures, underfloor heating, solar, electric charger, tv aerial (that's the one we missed buying this place, albeit just put one in the loft myself). I have the house spec so I know where I stand but these are the areas I will negotiate hardest on along with a stamp duty contribution. If we can't agree on those then I'll likely pull out. I'm not desperate to move, but it would be good for the long term as I think everyone is pointing out.
You are both correct, really. While you have seen an absolute increase in value of 14%, you have fought against a strong tide with the newbuild and have severely underperformed against a market value property at the time.
Index since Q1 2014 until Q1 2021 for south west region was 39.97% for reference value.
This has changed of late, newbuilds while uninteresting to me personally, are at this moment actually competing with regular market value for a comparable property - something which i have never seen in my lifetime.
As Jez points out, your 14% increase isn't actually that. 2.3% of it is inflation and then when you compare it to most other properties in the area it will have failed to keep up with growth. People often get 'locked into' new builds as everything around them increases at a faster rate and their equality buys them a smaller % of anything other than another new build.
Those pointing out how great value a new build look at times aren't considering the longer term impact. If you are moving to a property and don't plan to sell until you downside / die then this isn't really of any concern, for everyone else who plans to upsize or another move in the future your investment (house) will actually perform at a worse rate, leaving it a much tougher job to upsize in the future. Staying in a new build for the short term (6 months up to 10 years) has this impact. Very long term (20 years for example) it eventually evens out as the house is no longer considered new and competes with other older stock.
^^^ The above is all historically speaking, nothing really applies at the moment in the short term (previous 18 months and next 18 months).
Well, having missed out on a few houses we'd offered on (in some cases even bidding £20k over asking), we've had an offer on a house accepted today, and with us already having provided the relevant paperwork and documents to get things moving, the house is already showing as "SOLD STC" which is great news. Taken 3 months in what has turned out to be an insane market at the moment. This house was only listed a week ago, and we saw other houses go in 4.
Our current house sold within 4 days of listing - we even had two blind offers on the house on the day of listing!
up in Liverpool area for reference.
Our current house sold within 4 days of listing - we even had two blind offers on the house on the day of listing!
up in Liverpool area for reference.Lost money, certainly not, this is why i said above that you are both, in a way, correct. What it has not done, is keep up with the house price index for the south west region, which between Q1 2014 and Q1 2021 was 39.97%. This index isn't formed by anecdotally looking at a few houses
As @Peerzy says, this "loss" (call it opportunity loss) against the index does need to be factored in when buying a new property, or at least, it does usually. As i say, the current situation really is unusual.
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Just got my mortgage deed through to sign, excellent.
Open it up and find they've sent someone else's through? Excellent.
Open it up and find they've sent someone else's through? Excellent.
Lost money, certainly not, this is why i said above that you are both, in a way, correct. What it has not done, is keep up with the house price index for the south west region, which between Q1 2014 and Q1 2021 was 39.97%. This index isn't formed by anecdotally looking at a few houses
As @Peerzy says, this "loss" (call it opportunity loss) against the index does need to be factored in when buying a new property, or at least, it does usually. As i say, the current situation really is unusual.
The % change on the house price index for my post code and the specific times it was bought and sold is 31.66%. We are pretty sure we took £10k less than we should have due to a **** show of an estate agent and we were in a way desperate to get to STTC, perhaps even £20k given that my neighbours house sold straight away at asking for £10k more than ours and his is a semi and ours was detached. That would make it a 19 to 23% increase. Granted, not near the index but close however still not losing money how some forum and social media rhetoric would make you believe.
Around here pre 2000's houses are actually incredibly expensive for what they offer, it's all area dependant and the index should only ever be used as a guide.